“The new normal is remodeling as an alternative to buying and trading up,” says Susan M. Wachter, professor of real estate and finance at Wharton University of Pennsylvania. “This points to a more sluggish housing market,” she adds. Indeed, homeowners spent $130 billion on renovations last year, up 3.1% from 2012, and such spending is expected to rise 8% more in 2014, says Stephen Melman, director of economic services at the National Association of Home Builders.
Others say homeowners have an eye toward selling, however. “Often times, a person will remodel a home to put it on the market or get it ready for the market,” says Steve Brown, president of the National Association of Realtors. In fact, pending home sales rose in March for the first time in 9 months, according to the NAR. “The Pending Home Sales Index,” based on contract signings, rose 3.4% to 97.4 from an upwardly revised 94.2 in February, but is still 7.9% below March 2013 when it was 105.7. “We look forward to a healthy, stable housing market for the balance of the year,” he says.
Looking at the numbers it seems that the remodeling business is doing quite well these days. What's keeping them so busy? A lot of this work is coming from sellers getting their houses ready for the market, and a large bit of the rest is coming from people opting to remodel and save money. A quick remodel can often be a much cheaper way to change up your living space/life style while adding equity at the same time. Check out this article from Marketwatch.com and you be the judge.
Jason Moon Real Estate Broker with ColdWell Banker Bain. Seattle, WA